Shield Fundinghttps://shieldfunding.com
Thu, 08 Mar 2018 23:08:32 +0000en-UShourly1The Most Common Small Business Loans Requirementshttps://shieldfunding.com/blog/small-business-loan-requirements/
Thu, 05 Oct 2017 12:01:11 +0000https://shieldfunding.com/?p=13907Common Small Business Loan Requirements If you are an entrepreneur or small business owner who is ready to take your business to the next level, it may be time to look into acquiring small business loans. After all, to make money, you need money. Fortunately today’s financing landscape features several options when it comes to […]

If you are an entrepreneur or small business owner who is ready to take your business to the next level, it may be time to look into acquiring small business loans. After all, to make money, you need money. Fortunately today’s financing landscape features several options when it comes to applying for funding including traditional banks, alternative business loans, and grants.

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It is important to note that each funding provider has its own set of documents required to approve a small business loan or grant. Banks or more traditional lenders are going to require a lot more documentation than alternative lenders. Grant providers probably require the most paperwork and offer the slimmest chance of funding approval. Regardless of what type of lender you select, acquiring funding takes preparation and work. The more paperwork you have available the faster the application process will be and the more likely you will receive the funding you need. To help you speed up the process, here is a comprehensive list of all the types of documents you should have on hand for each type of loan. That way, when it’s time to submit your application, you’ll be all set and ready to go.

Documents Required for Traditional Bank Loans

Traditional banks may be the first type of lender that pops into your mind when you think about applying for a small business loan. While it’s true that traditional banks are the largest type of small business lenders, it’s also true that it’s much more difficult to secure a traditional bank loan, and the majority of small business applicants get rejected. To get a traditional bank loan you most likely need great credit, healthy financials, collateral, a personal guarantee, and the process can last for months.

If you have time to wait for funding, great credit, and are interested in low, fixed interest rates, then applying for a traditional bank loan may be a good option. Before you even set foot in the bank, here are the documents and relevant information you should have prepared to present to your lender.

1. Personal Identification

It may seem obvious, but you’d be surprised how many business owners forget to bring their personal identification when applying for a loan. To apply for anything you have to prove that you are who you say you are. This means you should have a copy of your personal identification, which may include your driver’s license, passport, and/or birth certificate.

2. Business Licenses and Certificates

Not only do traditional banks want proof of identification, but they want verification that you are operating legally in your state and city. This means you need to show up with a copy of your updated business licenses and any other certificates that you need to legally operate your business.

For example, if you run a restaurant, bring your: business license, food handling and safety permits, building license, liquor license, music license, franchise or trademark license, etc. The government requires different licenses for different types of business owners. Before you show up at the bank, make sure you have updated copies of all relevant licenses. Otherwise, the bank may deny your application.

3. Current Loan Documents

Do you have another type of business loan? If so, the bank is going to want all the details of your loan. Banks will take other loans into consideration when deciding whether or not to offer you funding, so be prepared to disclose this information.

4. Business Leases

Having a copy of required documents on hand includes any business leases. This means if you have any equipment leases or building leases, you need to bring documentation that provides the banks with all necessary information.

5. Personal and Business Taxes

It’s safe to say that all banks want you to bring the last 2-3 years of your income and business taxes. The reason banks want your full tax returns (not just the first few pages) is because it gives them a comprehensive idea of your income, business losses, capital gains, depreciation losses, deductions, and more. When underwriters review this information, they get a better idea of how much they feel comfortable loaning you and whether or not you will be able to make due on your end of the bargain.

6. Business Plan

When applying for a traditional bank loan, it’s also smart to bring a professional business plan. A business plan outlines your vision, business goals, marketing efforts, mission statement, employee needs, and more. Ultimately, it shows your lender the plans you have set forth to achieve your business goals. This helps banks feel more secure about your potential success as a business owner.

7. Work History or Resume

Similarly, it’s important to bring an updated resume. A resume will show your past experience and help banks learn about your past successes and evaluate your potential success in your current business.

8. Personal Credit Reports and FICO Scores

Most banks will just ask for your social security number and permission to pull a credit report for you. This means you don’t have to actually bring a credit report to the bank. However, you may want to gain access to a report beforehand, so you know what to expect in terms of interest rates and whether your credit is good enough to qualify for a traditional bank loan in the first place.

Remember, traditional banks typically only lend to borrowers with great credit, and the better your credit, the lower your interest rate will usually be. If you don’t have excellent credit, then it makes more sense to skip out on the lengthy traditional bank lending process and opt for an alternative lender instead. More specifically, if your FICO or credit score is 700 or above, you can probably secure a traditional bank loan if you have all the other financial requirements. If your FICO score is less than 700, it makes sense to look beyond banks for funding.

9. Financial Records

All lenders, especially banks, will want a copy of your financial records. If you already own and operate a business, make sure you have all of your financial reports from at least the past 2 years on hand. The more information lenders have about your business the easier it is to approve your business for a small business loan. Even if you opt for an alternative lender where there are significantly less documents required for an approval, the clearer the financial picture on your business the better the rates and terms and the larger the funding amount.

10. Income Statements/P&L Statements

Some lenders will specifically require that you include your profit and loss statements when they request financial records. This should include all of your revenue and expenses from the last 2 years, specifically from the last 120 days.

11. Legal Documents and Entity Type

Do you have a partner? Do you have ownership agreements? What type of business entity are you? When applying for a bank loan, make sure to gather all the legal documents that answer all these types of legal questions. It will make the lending process a lot smoother.

12. Ownership and Affiliations

If you have financial interest in any other businesses, then be prepared to disclose that information to your lender. Additionally, if you have any partners that have financial interest in your business, they may need to sign on the loan as well.

13. Landlord Subordination Form

Traditional banks don’t always request this form, but sometimes they do. This is a form from your landlord that assures you will be able to stay on the property for the duration of your lease. Sometimes traditional lenders will require this for brick-and-mortar shops. Most lenders also want to know that you pay your rent on time so be prepared to supply documents regarding your business property.

The application for a traditional bank loan is often complicated and requires a lot of documents. If you plan on going this route, make sure you are prepared with all the right information to avoid any delays as this process can be lengthy already. For small business loans that do not require so much time and paperwork you may want to choose an alternative lender.

Documents Needed for Alternative Business Loans

There are several reasons why an alternative lender may be a better option when compared to traditional lenders and grant providers. The application process is a lot quicker, there are loose credit requirements, they often offer special lending programs for women, minorities, and underserved groups, and you don’t need to gather nearly as many documents. Alternative lenders also offer a variety of financial products so if you have really good credit but fall just short of traditional lending requirements you can find competitive rates and terms. Another plus is if your FICO score is below 600 alternative lenders offer low doc bad credit business loans.

If you have bad credit, need money more quickly, or don’t want to deal with a lengthy loan application process, then seeking out a small business loan from an alternative lender may be the perfect fit for you. Here is what you need to have ready to apply for alternative funding.

1. Basic Information

Initially, to get a pre-approval an alternative lender will simply want to know your name, business name, number, email address, monthly gross sales, and the amount of money you are requesting. You can quickly enter all this information with an online application, and then a representative will call you to go over your funding options.

2. Bank Statements

The more financial information you can present to a lender, the better. However, most alternative lending companies will be satisfied with at least 4 months of bank statements. They want to know what your income is to determine how much you qualify for, that you’re a good investment, and that you can be a responsible borrower.

3. Average Bank Balance

In addition to bank statements, many alternative lenders will ask for your average bank balance. This will show lenders that you are able to manage a positive cash flow and your financial picture demonstrates a little bit of cushion in case of an emergency.

4. Balance Sheet

Alternative lenders don’t require full financials like a traditional bank, but it will help them if you can offer a balance sheet. A balance sheet will just show lenders how you manage your assets and liabilities. This gives lenders more confidence in your ability to repay them. For most lenders an average bank balance and a couple months of financial information will be enough, but this is a good document to have if you are seeking a larger funding amount for a longer period of time.

5. Time in Business

You don’t necessarily need official documentation to prove how long you’ve been in business, but most alternative lenders will want to know how long you have been operating. The longer you have been in business, the more likely you are to get a loan. However, most alternative lenders only require you to be in business for a few months to be eligible for a loan.

That’s all you need to get started with a loan from an alternative lender and the application process is much quicker than a traditional bank, usually a few days to a week or two.

Documents You May Need When Applying for a Grant

The last of the most common types of funding for small businesses are grants. Grants are notoriously difficult to come by and require a ton of paperwork, but if you have an organization that meets the eligibility requirements it can be a great source of funding. Most grants, whether federally funded or private will include the grant information materials as well as instructions for your application that you can download. It is a good decision to read through the grant proposal instructions before doing the legwork to get the documents in place as each organization has different requirements. Although the documents you need in order to apply for a grant will vary depending on the organization offering the grant, here are some common documents that many organizations will ask for from you.

1. Grant Proposal and Cover Letter

Often required is your grant proposal’s cover letter. Each grant has different requirements for the overall proposal which can be an extensive set of documents, but a cover letter is commonly required and can be a powerful introduction. Some of the basic details included in a cover letter are information about your organization, how you project aligns with the overall mission of the grant provider and how you plan to use the funding, and how your project will improve the community. Here is a sample grant proposal and cover letter.

2. Business Plan

When applying for a grant, one of the most important documents to have in order is your business plan. Organizations that offer grants want to make sure the money they are giving to you is going to good use, and that you have a solid plan for putting the money to work. Before you apply for a grant, go through your business plan with a fine toothed comb and make sure it is both clear and viable. Although it can be a long process developing your business plan, it is never a bad idea to have a well thought out business plan no matter what stage you are at in the business growth process.

3. Proof of Status

Most organizations offer exclusive grants for women, minorities, and/or non-profit organizations. To be eligible for the grant, you’ll need to pull documents together that prove your business entity is a non-profit, minority owned, or has the organizational structure or certification that meets the eligibility requirements for a particular grant.

There are several different types of business grants available and it is important to note that each one has its own individual document requirements. However, a good rule of thumb when starting the paperwork process is to gather your general business ownership information, a grant cover letter, a business plan, and any proof of certifications if available. If you have this information on hand, you’ll be a step ahead in the application process.

Wrap-up

When it comes to getting funding for your business, you have several options that include traditional funding, alternative funding, and grants. All of these business financing options have different document requirements although there is some overlap. The best thing to do is try to gather as many of the above mentioned documents that are readily available and then inquire with possible funding sources to learn about their individual document requirements. It is a safe bet that you will need some or all of the above mentioned documents throughout the loan application process. The more prepared applicant you are the more likely you are going to receive the funding you require.

]]>Small Business Loans for Minoritieshttps://shieldfunding.com/blog/small-business-loans-for-minorities/
Mon, 24 Jul 2017 23:26:37 +0000https://shieldfunding.com/?p=13306The Complete Guide to Business Loans, Grants, Rewards, and Resources for Minorities As of the most recent US Census data report, there were 8.0 million minority-owned firms nationally, and reported receipts from those minority-owned firms totaled $1.4 trillion in 2012. This represented a 34.7 percent growth rate in only 5 years. With 28.8 U.S. firms […]

]]>The Complete Guide to Business Loans, Grants, Rewards, and Resources for Minorities

As of the most recent US Census data report, there were 8.0 million minority-owned firms nationally, and reported receipts from those minority-owned firms totaled $1.4 trillion in 2012. This represented a 34.7 percent growth rate in only 5 years. With 28.8 U.S. firms being minority-owned firms, it’s clear that minorities in this country are contributing in a major way to the growth of the economy.

Shockingly enough, however, government reports indicate that minority and women-owned businesses are still far less likely to get approved for traditional business loans. While minority-owned businesses are at a clear disadvantage when it comes to acquiring traditional funding, thankfully, there are several other lending options and resources that cater to minorities. This guide will give you a complete list of resources and business loans for minorities to help you secure the funding you need to properly grow your business.

Government and Non-profit Resources

SBA 8(a) Business Development Program

The SBA 8(a) Business Development Program helps small, disadvantaged businesses compete in the marketplace. To qualify for this program, the applicant must show that he or she is a socially or economically disadvantaged business owner.

How to Apply

To apply for the SBA 8(a) Business Development Program, you must determine your eligibility, get copies of all required documents, get a free DUNS number, obtain a TIN number, create a SAM profile, get a SBA General Login System user ID, start a free 8(a) application, and apply.

Small Business Administration Guaranteed 7(a) Loan

SBA Guaranteed 7(a) loans are not reserved solely for minorities, but if you are disadvantaged and have participated in the SBA 8(a) Business Development Program, then it’s much easier to qualify for this loan.

How to Apply

To apply for an SBA Guaranteed 7(a) loan, you must prove you operate for profit, be engaged in business in the United States, have reasonable equity to invest, and use alternative financial resources like personal assets before applying for aid.

When applying for this loan, be prepared with your SBA loan application, financial statements, statement of personal history and finances, ownerships and affiliations, business certificates and licenses, loan application history, income tax returns, resumes, business overview, business leases, and more. Again, the process for applying is quite involved, so make sure to check out the SBA 7(a) application checklist to help keep you on track.

SBA Community Advantage Loans

The SBA Community Advantage Loans program helps underserved markets meet credit, management, and technical assistance needs. This program encourages local, mission-based lenders to offer loans of up to $250,000 by securing 85% of the loan.

How To Apply

To qualify for this type of loan, you will have to have good credit, but you don’t have to have a lot of collateral to secure the loan. The best way to apply is to visit your local SBA district office listed here.

SBA Microloan Program

The SBA Microloan Program is a great option for minority-owned businesses that are looking for smaller loans—loans up to $50,000. These types of loans are used to help smaller businesses get up and running and average about $13,000.

How to Apply

Small Business Development Centers

Small Business Development Centers (SBDCs) offer assistance to entrepreneurs and small businesses throughout the US. These centers offer free and low-cost training pertaining to finances, business plan development, disaster recovery, lending assistance, and much more.

How to Apply

The best way to get help from the SBDCs is to visit the website and get in touch with your local office.

The U.S. Department of Commerce’s Minority Business Development Agency

The Minority Business Development Agency (MBDA) has several resources to help minorities start and grow their businesses including capital, contract opportunities, and access to new markets. These agencies are located in areas where there are higher concentrations of minorities.

How To Apply

Since there are several programs and resources available through the MBDA, the best way to apply is to first locate your local business center. You can do this on the MBDA website by entering your zip code. Once you know where the closest business center is, call them or visit them to see what resources are available to you.

National Minority Supplier Development Council (NMSDC)

The NMSDC works to connect minority business owners to corporate members. They do this by certifying minority business owners as MBEs and facilitating MBEs into the public-sector and corporate supply chains. Additionally, the NMSDC provides education, programs, and help with developing lucrative partnerships.

How To Apply

The best way to get involved with NMSDC programs is to visit their website, pick the program that best suits you, and be in contact with NMSDC directly. You can learn more about their programs on their website.

These are the major government and non-profit resources. However, there are several other government, community, and non-profit resources available. Some notable programs to check out include:

Remember also to check with your local government centers. Many local governments provide robust resources for its community members.

Corporate Small Business Rewards for Minorities

Not only does the government provide help for minority-owned businesses, but there are a few outstanding corporations that have historically offered grants and funding to minority-owned businesses, even though the contests and grants are not specific to minorities. Below are some favorites.

FedEx Small Business Grant Program

How To Apply

To apply for this grant, visit the FedEx Small Business Grant Application website. The winners for 2017 have already been selected, but you can start putting your application ideas together for next year.

Huggies Mom Inspired Grant Program

How To Apply

The application and award process takes about 6 weeks total. For more information on how to get the ball rolling, visit this website.

Banks & Alternative Lenders

While it’s important to research government, non-profit, and corporate resources, grants to see what is available to you, it’s also important to research bank programs and alternative lending options for minorities.

Why? Because often times, government loans and grants have lengthy application processes and it takes a long time to secure funding. For those times when you need capital fast, even if you have bad credit, there are bank loans and alternative lending programs for minorities. Here are some places to check out.

Shield Funding

Shield Funding happily offers business loans to minorities, regardless of credit score or history. In fact, small business owners with bad credit are encouraged to apply for a small business loan. All you have to do is prove your business has been operating for at least 4 months and submit your recent revenue information, and you’re on your way to receiving your funding.

How To Apply

Union Bank

Union Bank is one of the better traditional banks to check out, because they offer minority business loans under their Diversity Lending program.

How to Apply

To qualify, you must meet requirements for the ethnicity and race categories, own and manage at least 51% of the business, and meet a few other financial requirements. There is more information about how to apply listed on the website.

JPMorgan Chase & Company

VEDC and JPMorgan Chase is another bank that offers a specific expand loan program for African American-Owned business. However, this loan is currently only for business owners in Los Angeles.

How To Apply

Wrap-up

If you are a minority business owner that is looking for funding, don’t get discouraged if at first you don’t find what you are looking for at a traditional bank. Instead, comb through the comprehensive list above of government, non-profit, corporate, bank, and alternative lending programs that will help you get the funding you need to grow your business.

]]>Top Business Resources for Women Veteran Owned Businesseshttps://shieldfunding.com/blog/top-business-resources-women-veteran-owned-businesses/
Fri, 07 Jul 2017 00:45:26 +0000https://shieldfunding.com/?p=13199If you’ve recently returned from serving our country, and are looking to grow your woman and veteran-owned business, it’s great to know there are several resources available to help you. These resources include business training options, networking, and funding. Here are some of the top sites you will want to check out to help get […]

If you’ve recently returned from serving our country, and are looking to grow your woman and veteran-owned business, it’s great to know there are several resources available to help you. These resources include business training options, networking, and funding. Here are some of the top sites you will want to check out to help get your business up and running.

Networking Resources

Sometimes business is not about what you know, but about who you know. These organizations will point you in the right direction for meeting the right people.

National Veteran Owned Business Association
– Want to know who your colleagues are and what they are doing right? The NaVOBA is a great place to start.

Veterans Business Network
– If you are still looking to expand your network after checking out NaVOBA, then check out the Veterans Business Network. You’ll meet a lot of like-minded people who can help you achieve your business goals.

Women Veterans Rock
– Looking to connect with other women veteran business owners? Look no further than Women Veterans Rock. One of the best thing about this organization is they hold local events for networking.

Training Resources

If your business game is not quite up to speed, don’t let it hold you back. Instead seek out some of the organizations that offer training for veteran business owners.

Operation Boots to Business
– This organization helps veterans make the transition from soldier to a business owner.

The Vets Group
– The Vets Group provides business and IT training to vets. This organization will not only provide you training but also will help line you up with other helpful federal resources for vets.

Veteran Women
– Veteran Women is an awesome organization for veteran women who are also business owners. They offer training, networking, and helpful resources to help you get your business where it needs to be.

Small Business Loan Resources

Now that you have some networking and training contacts, let’s talk about how you can get funding as a veteran and women-owned business. Here are some of your top options.

Veteran Small Business Award
– Street Shares offers a Veteran Small Business Award each month. The prizes are $5,000, $3000, and $2,000 to 1st, 2nd, and 3rd place, respectively. You may need additional funding, but it can’t hurt to apply for this award if you are a veteran and business owner.

The Jonas Project
– The Jonas Project offers all sorts of business help for women veterans including funding prep. Check out The Jonas Project website for more information.

Veterans Business Fund
– The Veterans Business Fund is a non-profit organization that provides veterans with supplemental capital that is required to help veterans secure a small business loan.

Shield Funding
– Shield Funding provides funding to veterans and women who have bad credit. The application process is quick and simple and you’ll be well on your way to building your thriving business.

The resources listed above will help you build your woman veteran-owned business upon returning home from serving our country.

]]>How to Choose a Lender When Banks are Not an Optionhttps://shieldfunding.com/blog/how-to-choose-lender-banks-not-option/
Wed, 28 Jun 2017 21:49:31 +0000https://shieldfunding.com/?p=13188How to Choose a Lender When Banks are Not an Option When it comes to finding a lender for a small business loan, you have a plethora of good lending options. The main two types of lending options for small business owners include traditional banks and alternative lenders. The type of lender you end up […]

When it comes to finding a lender for a small business loan, you have a plethora of good lending options. The main two types of lending options for small business owners include traditional banks and alternative lenders. The type of lender you end up selecting will often depend on your financial situation, the type of business you have, what your credit looks like, how long you have been in business, and how much money you are looking to borrow.

Here is a brief overview of what a small business owner that does not meet traditional lending requirements should look for when choosing a lender as the most likely choice for the very few with excellent credit will be their local bank. The great thing is that there are several alternative lending options on the market for business owners with bad credit, and obviously you want to secure a loan with the best lender that matches your credit needs.

Here is a quick rundown of requirements you should make sure your alternative lender meets before settling on a lender.

No Good Credit Requirements

The main reason to opt for an alternative lender is they are willing to lend to you, despite any problems with your credit score. Although alternative lenders do provide small business loans with bad credit, some have minimum score requirements such as a 650 FICO score. When choosing a lender, pick one that doesn’t have high credit requirements put in place in order for you to get a loan.

Rather than judging your ability to pay back the loan based on your credit score, a good alternative lender will instead ask for proof that your business has been operating for at least 2 months and that you show proof of gross monthly revenues (usually a minimum of at least $2,000).

A solid bad credit business lender will put faith in your business skills and ability to make money, rather than only lending to you if you have a certain credit score.

Variety of Lending Options

Small business owners have a variety of different funding needs. For example, one small business may need a working capital loan for short term cash requirements while another small business needs an equipment loan. Similarly, the type of loan you need now vs. the type of loan you may need in the future will often vary.

When selecting an alternative lender, make sure the lender offers a variety of lending options including, but not limited to the following:

Merchant cash advance

Line of credit

Equipment loan

Professional practice loans

Working capital loan

Installment loans

Franchise start-up loan

Private business loans

And more!

The more diversified the loan options are, the more you can count on that your lender is legitimate and experienced.

Transparency About Interest Rates and Fees

When it comes to finding the right business loan, there are two very common mistakes small business owners make when choosing an alternative lender. The first one is that most alternative lenders do not offer loans with an interest rate, what actually is offered is a factor rate where they purchase your receivables up front at a discount. The second common mistake is that borrowers only look at the factor rate and they do not consider any of the other fees involved. These fees will be additional costs not included in the factor rates charged, such as origination fees, application fees, guarantee fees, late payment fees, check processing fees, underwriting fees, prepayment penalties, and potentially more depending on your lender.

When choosing a lender, pick one that is transparent about not only their factor rates, but all the fees involved in securing the funding. It may be tempting for you to select a big name alternative lender, but when all is said and done, it is better to select a lender that lets you know exactly how much you will be paying in interest rates, additional fees, and potential penalties over the life of your business loan.

Helpful Customer Support Team

When you secure a small business loan with a lender, there will be times when you want to contact a member of a support team for help. Maybe you want to make a payment early and see if there are pre-payment discounts, perhaps you have a question about when your funding will come, or maybe you will want to inquire about rates and fees. Regardless of what your potential customer service need might be, the last thing you want is to call into your lending company and never get to talk to a human or having to wait 2 hours to get someone on the line.

When choosing a lender, you should look seriously into how accessible their customer support team is to you. Before sealing the deal, make sure the lending agent provides you with a customer support number, an email address, and that they have visible contact information listed on their website.

Wrap-Up

If you are a small business owner with bad credit and you are looking for a business loan, there are several options available to you. Just make sure when you choose a lender you find one that doesn’t require you to have good credit, offers a variety of lending options, is transparent about their fees and rates, and provides you with top-notch customer service.For more information about getting a bad credit business loan from a lender that is transparent throughout the entire lending process contact Shield Funding today!

]]>Bad Credit Business Loans: A Good Thinghttps://shieldfunding.com/blog/bad-credit-business-loans-good-thing/
Thu, 02 Mar 2017 23:22:51 +0000https://shieldfunding.com/?p=12802 Per the Small Business Administration (SBA), nearly two-thirds of all small businesses apply for loans annually. What is discouraging, however, is that only slightly more than one quarter of these applications are successful. The number of approvals for those with bad credit is even worse, which should concern a business owner who needs capital […]

Per the Small Business Administration (SBA), nearly two-thirds of all small businesses apply for loans annually. What is discouraging, however, is that only slightly more than one quarter of these applications are successful. The number of approvals for those with bad credit is even worse, which should concern a business owner who needs capital for expansion and does not have a great credit history. Considering the likelihood of a traditional business loan or some of the available financing alternatives, most small business owners today will find that bad credit business loans are a good thing.

Problems with less-than-stellar credit

Small business owners nearly always face challenges applying for business loans, and it is not strictly tied to credit history nowadays. For instance, today many large banks are shying away from business loans for less than one million dollars because of the minimal profit on these types of small business loans. A detailed report on business loans shows that it costs nearly the same money for a bank to process a loan for one million dollars as it does for a loan of fifty thousand. So even if you have great credit the likelihood of receiving financing for a small business is really small.

This problem is only exacerbated when you introduce poor credit into the application process. Traditional banks weigh risk when they are making a business loan, which means those who have credit problems will likely face additional scrutiny. There will likely be requests for additional paperwork and background checks that will result in a much longer and drawn out application process that will most likely end in denial.

Avoid credit card loans

Many small business owners will likely seek alternatives to a traditional bank loan. One of these options is a business credit card. The obvious issue is that having a poor credit score is going to limit your credit availability. Another reason this type of financing can be an issue is that credit card providers generally limit the amount of cash that can be taken against the actual credit line. That means that you may not have adequate funds to launch a marketing campaign or fund some type of expansion where cash is essential. Additional negatives with this type of financing are hidden fees, the potential for using the card to purchase unnecessary items, as well as the downward pressure on an already weak credit score.

Microloans are not always a good answer

Microloans can be an option for individuals with less than perfect credit but they are generally for 50,000 or less and are usually established for groups such as minorities, women owned businesses, or for groups or individuals in poor communities. Some of the larger providers offering access to Microloans are GreenAmerica and the SBA. Micro-lending is an unreliable option for most small business owners because the approve amounts are significantly less than 50,000. Accion, a major microloan provider averages about 6,000 per loan. Additionally many lenders have strict criteria for who may be eligible. Considering the limited amount of capital available along with strict criteria for lending Microloans are often not a good option for small business owners.

Borrowing from friends and family

Although borrowing from friends or family can seem like a great alternative considering the limited consequences of default and in most cases and the reasonable interest rates if any, it does have its caveats. Most small business owners do not have rich uncles that can write them a check for the full amount of money required for a business investment, so chances are the amount of capital that can be raised is severely limited. The larger issue is that borrowing money from friends and family can place a strain on an otherwise good relationship. You might develop a sense of obligation or inferiority with that person changing the dynamic of social gatherings, or you might just want to avoid that person entirely until your debts are settled. There are unlimited stories of how borrowing from friends or family killed the relationship. Borrowing the money from someone you know is usually a thought rooted in desperation, and most of the time is never realized for a countless number of reasons.

Bad credit business loans offer the best solution

For most business owners who are concerned about getting the money they need, bad credit business loans are generally the best option. There are several reasons to demonstrate why these types of loans are the best option when put up against traditional business loans, credit card loans, microloans, or the friends and family option. The following points allow you to see that bad credit business loans can be a good thing:

Availability – unlike bank loans or microloans, bad credit business loans are available to almost every business owner. There are no particular group affiliations or demographics required.

Credit Score Concerns – whether you are considering a traditional bank loan or a microloan your credit score will likely determine whether or not any funding will be available for you. That is one of the best features of a bad credit business loan, they are for people with bad credit. The funding is based on your business health so no matter what your credit score is there is likely funding available.

No Funding Caps – another great feature with bad credit business loans is that there are no caps on how much money is available. Whereas microloans are capped for the most part at 50,000 with many programs offering much less, and borrowing from friends and family is almost guaranteed to fall short of the funding target amount, bad credit business loans are offered in amounts as much as 1 million dollars or more.

Credit Pressure – unlike bank loans or credit cards that certainly put negative pressure on your credit scores, bad credit business loans do not put pressure on your credit history. Many of these loans are funded privately so there is a great possibility that no negative pressure will be put on your credit history.

Personal Pressure – unlike a loan from a family member or friend, bad credit business loans do not require that you become a slave to the lender or completely ruin a good relationship. In fact, the entire funding process can take place online so you never have to meet a lender in person.

No Hidden Fees – when you take a loan out for the purposes of rebuilding your credit and funding your business, the last thing you need is unexpected fees. Bad credit business loans provide you with a clear understanding of the expenses involved and there are never any hidden fees – what you see is what you get. Banks and credit cards continue to make a big portion of their profits on many of these fees that are not immediately apparent.

No Strings Attached – banks sometimes put restrictions on how you can use funds you borrow. Credit cards limit amount of cash you can use so a large portion of the credit line might have to be for store purchases only. These restrictions may often mean you are unable to make the necessary investments in your business, negating the purpose of borrowing money in the first place.

Finding the right solution for your business financing needs is important and at Shield Funding we understand business owner’s needs. Our bad credit business loans are a great option when you need capital to grow your business. There are no hidden fees, no funding caps, no credit score requirements, and our programs are available to almost every business owner. More importantly, our relationships are built off of providing capital so you never have to worry about ruining any relationships. Rather than pinning your hopes on traditional financing, friends and family, or applying for a microloan or credit card that might not meet your funding requirements, apply for a bad credit business loan with Shield Funding.

]]>How Technology Changed the Lending Industryhttps://shieldfunding.com/blog/technology-changed-lending-industry/
Wed, 08 Feb 2017 01:15:06 +0000https://shieldfunding.com/?p=12795The online lending industry has been growing over the last couple of years at an incredible pace. Whether for business or personal, more loans are originated online than ever before. The industry was basically born out of the financial crisis. At the time banks were subjected to tougher regulations. To make matters worse for those […]

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The online lending industry has been growing over the last couple of years at an incredible pace. Whether for business or personal, more loans are originated online than ever before. The industry was basically born out of the financial crisis. At the time banks were subjected to tougher regulations. To make matters worse for those seeking credit, the poor economic environment made banks strongly averse to risk. As a result loans in any form became scarce. As the demand grew online lenders stepped in to fill the gap. Although the industry started on the backs of tougher banking regulations and the need for banks to avoid risk, it was actually technology and innovation that was the main contributor to the boom in online lending. If the growth trajectory continues there is good reason to believe that online lenders will replace banks as the go-to source for both business loans and personal loans.

Many of the statistics are hard to track in the online lending space because a large portion of the companies are small and private, however, there has been some recent statistics reported by a handful of companies in the public spotlight. According to a report by the California Office of Business Oversight, “Thirteen of the online lending sector’s largest firms made $15.91 billion in U.S. loans in 2014, up 700% from 2010… In the first six months of last year [2015], the same firms extended $12.47 billion in credit nationwide”.

These numbers represent only a handful of lenders in the industry but it provides insight into the type of growth being realized in the sector. It is important to highlight that online lending consists of both commercial lending as well as personal lending. As for the overall distribution of online loans “Consumer lending accounted for 82% of the total loan volume in 2014 at the companies surveyed, and small-business financing accounted for the remaining 18%”. Based on these statistics there is good reason to believe that online lenders are providing capital to potential banking customers.

How the Online Lending Industry Began

The main reason for the start of the online lending market is that borrowers needed money and banks were not providing that money. There is a wealth of data to show that U.S. banks had tightened lending to both companies and consumers at the start of 2008, and that trend would continue on for several years. In fact, there is good reason to believe that banks are still not lending to many potential customers. As a result of the financial decisions made by bank officers and institutions over the years, the demand for capital from sources other than banks was established and online lenders continue to take advantage of it.

How the Online Lending Industry Grew

Many consider online lending as the future of bank lending. The reason for this shift is not because of an absence of lending by traditional banks, that only helped open the door to alternative lending options. It is actually the innovation through technology and the resulting overhaul of the entire loan process by online lenders that has made the industry grow to where it is today. The main problem with the traditional bank loan process was that it was archaic in a society that was becoming more modern. Instant gratification, quick responses, short wait times and minimal personal interactions are now expected. As Bill gates stated in 1994, banks are “Dinosaurs”, and this statement is even more relevant today in regards to lending money.

The Innovation in Online Lending

Online lenders used technology to innovate the lending industry like Amazon did to books and retail. The innovations started with the application a borrower completed and solved issues throughout the entire funding process. The first problem solved for today’s borrower was that you no longer need to visit a bank to get capital, all you need is a smartphone or laptop. The traditional bank loan application required the borrower to physically be in the bank, and most likely follow with several more visits just to get the application started. Today for so many reasons people want to borrow through an end device that allows them to continue with their daily business.

People today are extremely busy in their everyday lives, there is simply not enough time in the day to go to the bank if it can be avoided. More and more the modern consumer is resorting to online transactions in place of visiting a location to make a purchase or get something done. A great example of the transition to online transactions is found in the travel industry. For years big ticket items such as hotels and airline tickets were purchased by visiting your travel agent and sitting down in an office. With the growth in online travel sites such as Priceline and Travelocity it is easy to see that people no longer want or need the “in office” experience. This idea is further supported by the growth in ecommerce, online insurance policies and mortgages, virtual meetings, and all the government offices no longer visited because so many transactions are now conducted online.

Another killer to the bank loan application process was the actual amount of time required to complete the paperwork. According to the statistics at three conventional banks the amount of time small business owners spent on the completion of paperwork was on average 25 hours, the online lender’s entire application could be completed in 30 minutes, and it can be done from a handheld device. This type of speed helped establish a clear competitive advantage for online lenders.

The speed of the application process is also important is because borrowers want to know if they are approved and for how much. Decisions in life and business today need to be made in nano seconds, it is the difference between success and failure. Traditional bank lending could leave a borrower waiting for months to get an approval whereas a borrower can have an answer in a matter of hours with an online lender.

It is not only the speed of the application process that made online borrowing more attractive than traditional bank loans, it is also the speed in which a borrower could actually have cash in hand. One of the earliest selling points of online lending was approvals within 24 hours, cash in your account in 2 to 3 days. The stark differences between the application processes are night and day, and in a fast pace society where time means everything, more and more people are going online for their funding. Technology has clearly helped innovate the application process, but online lenders did not stop innovating with the paperwork, they are also using it for the underwriting process as well.

Technology has played a fundamental role in the underwriting process for online lenders as of late. Whereas banks have always relied on personal credit or FICO scores as a main approval factor, online lenders incorporate hundreds of factors to approve a loan with FICO being just one small part. Predictive modeling and the aggregation of data is how online lenders determine a borrowers probability of paying back a loan.

The bank loan underwriting process is outdated in a much more complex society and it does not reveal the true probability of whether a borrower can pay back a loan or not. A great example of this in a recent article highlights the point when considering a small business loan for a company. “Where a bank sees a generic SMB with a business owner FICO score of 650, OnDeck [an online lender] sees a plumber with far higher efficiency than comparable businesses in its zip code”. Lenders also incorporate background checks, online reviews, social media and a variety of other indicators to determine the health of a business. Some even incorporate a company’s Quick Books entries and various other cash flow statistics to underwrite a loan. All of the data available on a borrower can be aggregated in a matter of hours because of the advancements in technology. Having data so quickly and a technologically advanced understanding of that data is what allows online lenders to approve personal loans with FICO scores under 700 as well as approving bad credit business loans for small business owners with FICO scores under 600. Technological advancements and continuous innovation allow online lenders to continue to analyze prospective borrowers and approve loans in an efficient and accurate way.

Advancements in technology and a completely overhauled traditional lending process is likely the reason for the success of online lending. The industry continues to grow exponentially and the more accurate and technologically advanced the funding process becomes the more likely online lending will become the place to acquire a loan in the future.

]]>Don’t Make Your Business Loans Personalhttps://shieldfunding.com/blog/dont-make-your-business-loans-personal/
Wed, 11 Jan 2017 00:45:05 +0000https://shieldfunding.com/?p=12781Small business owners often compensate their work at their company in the form of a salary as well as using the company’s cash flow to pay for additional expenses in their everyday lives. This might include cars or transportation, cell phones and other technology, as well as a variety of other expenses. In fact, many […]

]]>Small business owners often compensate their work at their company in the form of a salary as well as using the company’s cash flow to pay for additional expenses in their everyday lives. This might include cars or transportation, cell phones and other technology, as well as a variety of other expenses. In fact, many of these expenses should never reach the balance sheet of a business. Any small business owner knows that the lines can easily get blurred between personal and business expenses when your life revolves around your company. Where this type of accounting can become a problem is when a small business needs to borrow money. What happens is now the business owner is using a business loan to finance his or her personal life. This results in money costs not justified with profit or opportunity and it is a recipe for failure. Any small business owner that requires funding should make sure that they separate personal and business expenses if they have any plans on building a successful company.

A Growing Business Needs Business Loans

Small business loans are very common for companies during the growth stages. On one side, you may recognize an opportunity to expand the company. This may involve opening another location, expansion through construction or inventory, or simply recognizing an opportunity in the market in one form or another. On the other side, it is not uncommon for a company to go through tough times in the first few years and need some sort of funding to keep the operation going. Simply put, there are a myriad of reasons that could create the need for additional funding for any young business. Knowing that your company is likely going to need money it is better to address the separation of expenses from the beginning.

Separate Expenses Now Because it Will Be Harder Later

Unless you hit it out of the park from your first week in business you are likely to need a business loan at some point. If you are a business owner that has all of your personal expenses tied to the company’s cash flow when the time comes to acquire the funding it will be very difficult to separate all of your personal expenses in the moment that a financial crisis arises. Financial problems are almost always immediate and they put you in a position where time is at a premium. Sitting down digging through all of your expenses is going to be the last thing on your to-do list.

Why Separating Expenses is So important

The most basic reason for the separation of business and personal expenses is to determine whether or not the business is successful. Every business owner is different and so are their expenses and tastes. So as an example, if you have two mirror businesses that generate the same amount of money and profit, but they have two very different owners who both draw off the business for their personal expenses, one company could be very successful in profit and overall statistics but it is failing because of the strain from the owner who is a spendthrift. It is easy to see why a business should only pay expenses associated with the operation of the business.

The same rule can be applied to managing personal expenses. As the business should not pay the personal, the personal should not pay the business. If you separate all of your expenses you will be able to recognize if you are coming out of pocket for your business. Just as the success of a business may be hard to recognize with improper accounting, its failure can also be masked. You could be burning through your personal money in a failing business and not aware of it because you do not have the expenses clearly defined. When the bills become so intertwined it is easy to lose the ability to recognize failure.

Another potential risk of not managing the expense sheets correctly when taking a business loan is that it becomes difficult to determine if the loan itself was beneficial for the business. As an example, a good time to borrow money is when the potential profit or opportunity that is presented generates more money than the cost of the loan and the interest over a period of time. If there are unnecessary expenses coming into the company and being paid with the business loan then there is a possibility that the company will be deprived of sufficient funding. Any ongoing initiatives may be shortchanged because the funding simply ran out. Not only can this create debt that may not get repaid, it could potentially lead to dissatisfaction with the entire business loan process and the complete rejection of funding at a later date when borrowing may actually be the right decision.

Personal Loans are for Your Personal Life

Just as it has been emphasized to separate expenses, it is just as important to separate loans. Using a business loan to pay off your personal expenses sounds as bad as it is. The main problem is that a business loan can only make sense if it generates more money than the entire cost of the loan and paying your Arby’s bill is not really a good profit opportunity for your company. A business loan is meant for a business, and the costs associated with that loan are intrinsically tied to a business’ financial structure; hence the name business loan. It is for this reason the there are different loans for the personal sphere.

Just like there are times where borrowing for a business can be advantageous, it can also be the case with a personal balance sheet. If you find that your salary is not paying the bills and a personal loan would allow you to save money over a period of time versus carrying the debt or payments as is, it may very well be a good idea to borrow personally. It is also likely that the cost associated with a personal loan will come in at a lower rate compared to a business loan because it is tied to a personal financial structure. Whether or not you need additional funding personally, structuring a loan outside of your business makes financial sense.

What Should You Do if Your Business is Paying the Personal?

The first thing to do is make a list of every single expense you have, whether business or personal, if the money goes out it should be on the list. Determine what should be attributed to personal expenses and what should be in the company’s expenses and separate them accordingly. When determining what expenses go where it should be noted that a business owner’s salary should be commensurate with position and experience. Many business owners just take a salary based on personal needs or expectations and not what the position warrants. Accounting with these ideas in mind is a prudent an efficient way to manage any expenses you encounter.

There is no doubt that any successful business requires very thorough accounting and excellent financial management. Many small business owners utilize their business to pay for personal expenses when a business should only pay costs associated with operating the company. This type of behavior can hurt a business over the long term and limit its chances of success, especially when the company requires a business loan from an outside resource. When a business loan begins paying personal expenses it increases the possibility of failed company initiatives and missed opportunities. In order to avoid this type of financial pitfall a small business owner should keep track of every expense no matter how small it may be, and have a clear line of separation between what is a business expense and what is a personal one.

]]>Is The Trade Deficit Affecting Small Business?https://shieldfunding.com/blog/trade-deficit-affecting-small-business/
Fri, 09 Dec 2016 00:33:59 +0000https://shieldfunding.com/?p=12772Is the growing trade gap in the United States hurting American companies? It is a well known fact that the United States continues to have alarming trade deficits with many different countries. At the top of the list impacting the U.S. deficit is China. In 2015 the U.S. trade deficit with China hit approximately 337 […]

]]>Is the growing trade gap in the United States hurting American companies? It is a well known fact that the United States continues to have alarming trade deficits with many different countries. At the top of the list impacting the U.S. deficit is China. In 2015 the U.S. trade deficit with China hit approximately 337 billion when you deduct the trade surplus of 29.5 billion from the U.S. services exports to China. Although China is the largest contributor to America’s trade deficit, it is not the only country the U.S has a trade deficit with. The U.S. also has trade deficits of approximately 50 billion dollars or more with Japan, Mexico, and Germany based on the latest data available. There are also many other countries that the U.S. has trade deficits with in the billions.

The overall trade deficit for goods and services in the U.S. in 2015 was over 530 billion, a significant increase from the 505 billion in 2014. Manufacturing is always at the center of the issue because the merchandise or goods deficit without considering services is the largest part of the deficit. The goods trade deficit for 2014 was approximately 741 billion and peaking at almost 760 billion in 2015. The trade in services is the bright point of the trade balance as it is trading at a surplus. In 2014 the trade surplus for services was 231.8 billion and just shy of that in 2015 at 227.4 billion. However, the goods trade deficit is so large and continually growing that the trade surplus which was down year over year offers little relief.

The trade balance consists of exports or goods and services that are produced domestically by a given country (The U.S. for purposes of this reading) and sold to other countries. These exports produce income as well as jobs for a country as the need for manufacturing and services grows. On the other side of the spectrum are imports, or goods and services that are produced by other countries and purchased by a given country. The trade balance will have a surplus or deficit depending on whether or not more products and services are bought than sold or vice versa by the given country; the trade balance whether positive and at a surplus, or negative and at a deficit is the difference.

How does a trade deficit affect American businesses?

One of the most common beliefs is that trade deficits result in job losses and companies downsizing, and in some extreme cases companies going completely out of business. As an examples, in a recent article economists pointed out how a sharp decline in U.S. manufacturing beginning in 2000 and continuing for more than a decade coincided with huge growth in China imports. It is simply too hard for domestic manufacturers to stay competitive in markets when foreign countries can offer the same or similar products at a significantly lower cost. The reason many foreign countries can produce products at lower prices is because they offer their employees lower wages, and they have less safety and regulatory restrictions for both health & safety standards and the environment. The end result is a much lower price for the foreign country to produce goods which in turn leads to more exports by that country, and at the other end the domestic companies begin downsizing or failing because there is less of a need to produce products that can be imported for much cheaper.

There are countless companies in the U.S. that discuss the pressure put on their companies by cheaper imports. Many of these business owners find themselves failing to pay creditors, and utilizing credit cards and business loans to stay afloat. It is a domino effect and the resulting pain and loss that companies and workers in the U.S. are experiencing was at the center of the presidential election. Many business owners and their employees voiced their frustration and financial difficulties as a result of the manufacturing and ultimate imports of foreign goods and services.

Most small and medium sized business owners that are being affected in one way or another by the trade deficit have no idea what the deficit actually is, or where most of the goods or services are coming from. To make matters worse, there are so many arguments by expert economists for both the good and bad of trade deficits that it is almost impossible to come to a definitive answer on whether or not deficits are healthy for an economy. In an effort to inform business owners of the actual data we have created an easy to read infographic that highlights the main statistical points of the U.S.Trade Gap and America’s recent trade data between America’s top 30 trading partners. Do you think that your business is being affected by trade? Have a look at the infographic below.

]]>Understanding Bad Credit Business Loans in 5 Minuteshttps://shieldfunding.com/blog/understanding-bad-credit-business-loans-in-5-minutes/
Thu, 01 Dec 2016 22:38:03 +0000https://shieldfunding.com/?p=12756So, you need a business loan, but you have bad credit? As you probably know, today you definitely have the option to get a bad credit business loan, but you may be wondering what that really means. Here is everything you need to know about bad credit business loans presented in a Q/A format that […]

So, you need a business loan, but you have bad credit? As you probably know, today you definitely have the option to get a bad credit business loan, but you may be wondering what that really means. Here is everything you need to know about bad credit business loans presented in a Q/A format that you can read in less than 5 minutes.

Q: Can I REALLY get a business loan if I have bad credit?

A: Yes, absolutely! There are several funding options for business owners with bad credit. Instead of approving a small business loan based solely on your credit report, alternative lenders will look at your actual business finances. They will want to know how long your business has been in operation, how much revenue you are generating each month, and how much you need.

Q: What information do I need to provide to be eligible for a bad credit business loan?

A: To be eligible, you must fill out a short application, your business needs to be in operation for 4 months, and you must provide recent bank receipts or credit card statements. You must show that you have a minimum of $5,000 per month in gross revenues (if you accept credit cards) and approximately $20,000 (if you don’t). That’s all the information you need to provide.

Q: How long does the application process take for a bad credit business loan?

A: One of the best things about getting a bad credit business loan is the application time is short. All you have to do is fill out a quick online form and an application will be automatically emailed to you. Then, you fill it out and sign the application, as well as send in 4 months of statements, and your application is ready for review and approval. The general approval process is 1 to 2 days, yes that fast!

Q: How much funding can I get?

A: There are several options, but at Shield Funding, your unsecured business loan or business cash advance loan ranges up to $500K+.

Q: Do you have to switch your processing company?

A: No, at Shield Funding, we do not require you to switch your processing company.

Q: How do I pay back my bad credit business loan?

A: It’s easy. If you switch your credit card processor, then we will setup the account so a small percentage of the generated sales are allocated to your business loan payment. If you do not switch your processor, then we set up a lockbox with your processor and the small percentage of the generated sales is deposited towards paying off the loan. In the event you don’t process credit cards, Shield Funding offers bad credit unsecured business loans. With these loans the payments are deducted from your bank account in a process similar to direct deposit.

Q: What happens once the bad credit business loan is paid off?
A: Once your loan is paid off, we will no longer take a percentage of your sales.

Has it been 5 minutes? Now you now know everything there is to know about getting a bad credit business loan with Shield Funding. To get started, simply fill out an application today. We can’t wait to help you.

]]>How to Outsmart Banks and Get The Small Business Loan You Needhttps://shieldfunding.com/blog/outsmart-banks-get-small-business-loan-need/
Tue, 25 Oct 2016 23:59:52 +0000https://shieldfunding.com/?p=12717If you are a small business owner who has become frustrated by looking for a small business loan, the following scenario might sound familiar to you. You go to your bank, collect a large amount of necessary documents, apply for funding, and wait for weeks or months only to be rejected for bad credit. In […]

If you are a small business owner who has become frustrated by looking for a small business loan, the following scenario might sound familiar to you. You go to your bank, collect a large amount of necessary documents, apply for funding, and wait for weeks or months only to be rejected for bad credit. In the instance you are not rejected by the bank because of bad credit, the time it takes to complete the application process and actually receive the funds can take so long that any opportunities will be lost or worth substantially less. If you’ve run into this scenario, this article is for you. Here are some secrets to help you outsmart big banks and get the financing you want in a timely matter so you can take advantage of opportunities that arise in your business circle.

1. Forget your credit.

Small business owners spend so much time worrying about their credit that it’s exhausting. Many of these business owners spend a significant amount of time and money just trying to add a few points to their credit score; all of this effort and stress to improve their chances of getting a small business loan from a bank. The problem is that banks continue to put heavy restrictions on the loan application process and are only looking for perfect credit borrowers, a credit history almost unattainable in today’s economic environment.

Although the banks restrictive approval process has been a long-standing approach to lending, it is actually not relevant any more. In fact, this approach has led to significant decreases in bank loan portfolios, and their overall participation in the small business loan space.

Eating up the market share from banks are privately held companies known as alternative lenders. What makes alternative lenders so attractive is that their approach to lending is way more flexible. These lenders realize that there is more to the lender/borrower relationship than a perfect credit history. For example, alternative lenders will lend to a small business, even if the small business owner has bad credit. All the borrower has to establish is that they have:

An operating business

The ability to make money

The integrity to pay the loan back

And, that’s it.

Rather than spending time and money trying to fix your credit to be “worthy” of a big bank loan, ditch the big bank and opt for a more realistic option through alternative lending.

2. Time Affects the Value of Your Business Loan.

Even if credit is not a big issue for you, the time you have to wait for funding from a bank can often make a bank loan worthless. Small business owners today do not have the time to wait to make financial decisions. It is common knowledge in today’s fast based economy that time has a tremendous value, opportunities do not wait. Imagine putting together the launch of a new product or drawing up plans for expanding your business because you recognize and opportunity, but everything has to be placed on hold for weeks or months before you are approved to receive the funding. This time lapse would likely eliminate any opportunity that surfaced. There is so much red tape with getting a business loan from a bank that the time you have to wait before you actually have the cash renders the business loan unusable.

With alternative lenders you don’t have to wait for weeks or months to find out if you got an approval on your loan. Many alternative lenders offer concrete approvals within 24 hours and actual funding in your account in 2 to 3 business days. Even if it is a bad credit business loan that comes at a premium, think about the value of immediate funding versus the long and arduous process the bank way. You might receive a better rate with a bank, but the opportunity cost makes the overall value of the loan much less than how it appears on paper. Rather than waiting around for big banks to get around to processing your loan, work with a company that processes your application immediately so you can take advantage of the opportunities available to you and your business.

3. Realize You Have Several Choices, Avoid the Monopoly Approach.

Most banks today will not offer a business loan to a company or owner that they are not currently working with. If you do not have a long standing account with an established record of transactions it is extremely unlikely that a particular bank can lend you money. The loan officer would also prefer to have had prior contact with you on a personal level before they write a check. This means that you are limited to one place to submit an application if you have the established track record, and whatever rates and terms you get if you are lucky enough to be approved, is your only option.

Alternative lending is a much more flexible process. This type of lender only requires a few months of transactions to establish cash flow patterns, documents that are likely available to you in minutes. More importantly, you have the option to submit your loan application to various lenders, whatever quantity you feel will help you get the best rates and terms that work for you. Also, you never have to meet anybody, the entire application and funding process can be completed from your home or office, all you need is a computer. Alternative lending offers the opportunity to force lenders to compete for your business, not the monopoly approach that banks take where it is one and done, take what you get.

If you are looking to outsmart the big banks and get a small business loan you want in a reasonable amount of time you have options. You deserve quick service and a variety of choices, and you don’t have to have perfect credit. Alternative lenders offer you a flexible lending process which helps you avoid the problematic process associated with seeking a loan from your local bank.